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Sweden's economy in good shape: report

Published: 31 Aug 2010 14:03 GMT+02:00
Updated: 31 Aug 2010 14:03 GMT+02:00

Exports, domestic demand and strong public finances all indicate that Sweden's economy is in good shape, the country's financial management authority and the banks, said on Tuesday.

SEB bank said that the Swedish economy has provided "upside surprises in

recent months."

It forecast that Swedish gross domestic product (GDP) to grow 4.7 percent in 2010, then decelerate to 2.9 percent in 2011 and 2.3 percent in 2012.

"Lower interest rates, tax cuts and a rapid upturn in exports -- combined with the absence of falling home prices -- have made possible a strong rebound in both output and employment after the deep recession," it said.

In its latest forecasts published less than a month ahead of the country's next elections, Sweden's centre-right government, which is hoping to win a second four-year-term on the back of a strong economic recovery, forecast a 4.5 percent rise in Swedish GDP this year and a 4.0 percent rise in 2011.

It also lowered its unemployment estimate to 8.5 percent for all of 2010 and to 8.0 percent next year.

SEB also forecast on Tuesday that the unemployment rate, which dropped significantly to 8.0 percent in July from 9.5 percent in June, would continue

to fall.

Sweden's national financial management authority (Ekonomistyrningsverket - ESV) meanwhile said it expected the government's finances to be balanced next year, and noted the country's economy was recovering more rapidly than previously expected.

"This year the central government budget shows a deficit, but balance is already attainted next year," it said in a statement.

"Further ahead on the forecast horizon, the surpluses get very large and the surplus target is exceeded," it added.

Nordic bank Nordea said on Monday that it expected Swedish public finances to be balanced as early as this year and also said that the labour market was improving.

It expected Sweden's GDP to grow "more than 4.0 percent" this year, with its export industry benefiting from a pick-up in global trade.

"Even if the international economy slows down, domestic demand in Sweden will contribute to sustaining growth," Nordea said.

Sweden's economy, which was hard-hit by the global financial crisis but which emerged from recession in the second quarter of 2009, is today considered one of the strongest in Europe.

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Your comments about this article

14:26 August 31, 2010 by Audrian
I find this report peculiar; it is too rosy. The US, which is Sweden's major trading partner, is languishing in a recession. This report does not show how America's economic woes is affecting Sweden's economic status, or the GDP.
16:45 August 31, 2010 by Vetinari
@ Audrian

There are other economies to export to other than the US. The states are no longer the end all, center of all trade it once might have been.

Not counting the fact that the US still imports stuff despite the recession, and the relative sizes between the US and Swedish economies means that even if the US imports less, it is still likely to be a major importer of Swedish from a Swedish point of view.
17:42 August 31, 2010 by 2394040
This report is highly suspect. Unemployment is high, so there's no way the economy is in good shape. It's a classic example of politicians manipulating statistics; especially when election time is near. One thing you have to remember where unemployment is concerned is that when people stop looking for work, they are assumed to be working.

When in reality they have just stopped looking for work; even if temporarily. The closing of the bank just the other day is NOT a sign of an economy in good shape.
21:20 August 31, 2010 by mikmak
Gdammit, try understanding why HQ got their license revoked before posting crap about the economy being in bad shape.
15:26 September 1, 2010 by skatty
As far as I remember, the Swedish economy has always been in good shape, no matter what is going on! Shape in Sweden is not a solid shape; economy is like gas and can get whatever shape, it's enough to get a kind of shape, and all shapes are good shapes. Don't worry, read the return of depression by Krugman.
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